Daughter’s Legacy Is Thriving Family Securities Business

Richard and Kaye Woltman have spent a lot of time in the securities industry and enjoyed a great deal of success, but their current enterprise, Girard Securities Inc., carries special meaning to them.

The Woltmans’ daughter, Melisa McGuire, who founded the San Diego-based business in 2001, died a year later, leaving the still nascent securities brokerage without a leader , and doubts whether it would survive.

After McGuire died from cancer at 37, the Woltmans decided to step in and keep the business going.

“It’s Melisa’s legacy, and it affects the lives of all the people who believed in her dream, and it’s the right thing to do,” said Kaye, who is Girard’s president and vice chairman.

Though the task was certainly bittersweet, the brokerage has turned in exceptional results in recent years.

From the end of 2002, when it had 58 licensed brokers, Girard Securities now counts 171 licensed brokers, and will likely expand that to more than 200 by the end of this year.

Gross revenues soared from about $2 million in 2002 to $23 million at the end of 2005, and closed last year at about $33 million, the company said.

Girard operates as an independent brokerage, contracting with brokers and providing them with an array of back-office support services in exchange for taking a small percentage of their commissions.

As independent brokers, Girard’s representatives generally retain higher portions on the commissions they earn, compared with their counterparts in much larger retail dealerships, which usually take out more than half the fees earned, said Richard Woltman.

A Show Of Support

Girard also provides a higher level of support to its registered representatives than the industry average, he said.

The ratio of representatives to each employee is 3-to-1, while an industry average is about 6-to-1, he said. With the lower ratio, service is generally better and problems get resolved faster and more quickly, he said.

“This is a firm that gives a lot of hand holding and service to the (brokers) in the field,” he said.

To accomplish the task, Girard has pumped about $1 million in the past year into new hardware, software and network systems to help its representatives better serve their clients.

The longtime rap on many stockbrokers has been that they are more interested in just selling stock, gaining commissions, sometimes moving in and out of stocks rapidly, a process known as “churning” an account. But Woltman said his firm’s representatives are focused on determining what a client’s needs are, what their age and goals are, and identifying their risk tolerance before devising and implementing an investment strategy.

He said Girard representatives, who have an average of 22 years’ experience in the business, aren’t trying to make high-volume sales, but in developing a client’s portfolio over the long term.

“Every independent contractor, whether they’re in Madison, Wis.; San Diego; or Chicago, Ill., is a small businessman and you will soon find out who the bad guys are.”

Girard brokers generally earn about 85 percent on gross fees and commissions, and pass on the remaining 15 percent to Girard for its services. After payments, the average earnings for a licensed broker is about $250,000 annually, Kaye Woltman said.

Industry Experience

Richard Woltman got started in the securities industry in 1975, co-founding a company that took advantage of the deregulation that took effect that year. It permitted dealers to negotiate the size of the commissions charged on transactions. Before that, commissions were all at one rate, and the industry was dominated by large Wall Street companies.

In 1986, the firm called First Affiliated was merged into another company, prompting Richard and Kaye to acquire Spelman